by Wendy Koch, USA TODAY

by Wendy Koch, USA TODAY

A new generation of nuclear reactor is scheduled to launch in the United States within a decade, potentially transforming the U.S. nuclear industry. But critics question its safety, given last year's meltdown of Japan's Fukushima Dai-ichi nuclear power plant and recent flooding from Superstorm Sandy.

These small modular reactors (SMRs), about a third the physical size of traditional ones, would be portable and built mostly in factories. They got a boost last week from the Department of Energy, which announced it would pay up to half the cost to design and license the first ones for the U.S. commercial market.

"It (DOE funding) lets us put our foot on the accelerator," says Christopher Mowry of Babcock & Wilcox, an energy technology company based in Charlotte, that's been working on the "mPower" design for four years with the Tennessee Valley Authority and Bechtel International. He plans to submit it to the Nuclear Regulatory Commission in mid-2014, aiming for approval in 2017 and construction of up to four reactors at TVA's Clinch River Site in Oak Ridge, Tenn., by October 2021.

Citing nuclear energy as "low carbon," Energy Secretary Steven Chu said the award is part of President Obama's push for a broad, "all-of-the-above" energy strategy that reduces greenhouse gas emissions. Chu said DOE will accept funding requests from other companies developing small modular reactors.

The B&W one won't come cheap. Mowry expects it will cost more than $1 billion to develop it, of which up to 75% will be spent on design and licensing. Yet he and other advocates say SMRs cost less to build, improve safety and offer flexibility. They say these reactors could be made in U.S. factories and moved, or exported, to remote or small sites that cannot support large reactors.

"You can put them together like Legos on a job site," Mowry says. "The industry likes building blocks of this size," he says, likening the heft of each to a tanker truck. He expects a two-reactor plant generating a total of 360 megawatts of power to cost $1.5 billion to build - about a tenth of the projected cost of a two-reactor, 2,000-megawatt plant the NRC approved earlier this year for Georgia.

Another benefit, Mowry says, is safety. He says it can operate for two weeks without outside power and has fewer parts and pipes so is less likely to malfunction. "Our reactor is totally underground," he says, adding it's not disturbed by hurricanes and tornadoes.

Not all are convinced. "Putting reactors underground could be a double-edged sword," says Edwin Lyman of the Union of Concerned Scientists, a research group skeptical of nuclear power. "Fukushima showed you don't want to flood your critical equipment," he says, also pointing to the flooding that Sandy wreaked this fall in New York and New Jersey.

Lyman says he places little stock in paper simulations of how a reactor will work, saying there are still huge gaps in understanding what went wrong with Fukushima's light-water reactors.Though much smaller, B&W's reactor is also light water, meaning it's cooled with ordinary water. It also generates spent nuclear fuel like its larger counterparts.

"On an economic basis, these reactors don't make sense," he says, adding they lack economies of scale that reduce per-kilowatt cost. He says they wouldn't be cost-competitive unless built in mass quantities - something that won''t happen for the initial ones. As a result, he says, the B&W project is a "very expensive experiment for us to be funding."

"The biggest challenge is financial," says Paul Genoa of the Nuclear Energy Institute, an industry group that supports SMRs. He says natural gas prices are low, the U.S. economy is still recovering from recession and there's no federal tax on carbon dioxide emissions, which would favor nuclear power.

Still, he says, companies are racing to develop several kinds of small reactors. Like B&W, NuScale Power, Westinghouse and Holtec are designing light-water reactors. Gen4 Energy, Toshiba and General Electric Hitachi are looking at a liquid metal-cooled version, while General Atomics and Pebble Bed Modular Reactor are focusing on a high temperature gas-cooled reactor.

TerraPower, a start-up partially funded by software mogul Bill Gates, is developing a larger, 500-megawatt, "traveling wave" reactor. Company CEO John Gilleland says it's on track to deploy its first reactor in the 2020s.

Genoa says U.S.-based companies are furthest along in developing small reactors, which he says many countries want. He says the U.S. has a chance to recapture its lead in nuclear technology, adding, "'This race is ours to lose."